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ITG Reports First Quarter 2016 Results

ITG ITG, +2.32% a leading independent broker and financial technology provider, today reported results for the quarter ended March 31, 2016.

First quarter 2016 highlights included:

  • GAAP net loss of $2.5 million, or $0.08 per diluted share compared to GAAP net income of $16.7 million, or $0.47 per diluted share for the first quarter of 2015. GAAP results for the first quarter of 2016 include (i) the amount expensed during the first quarter of 2016 of $2.8 million pre-tax, or $0.08 per diluted share after taxes, for upfront cash and stock awards granted to ITG's new CEO; and (ii) charges of $2.8 million pre-tax, or $0.05 per diluted share after taxes, in reserves and associated legal fees related to the arbitration with ITG's former CEO.

  • Adjusted net income of $1.8 million, or $0.05 per share, excluding the charges related to the upfront compensation expense for ITG's new CEO and the arbitration. There were no non-GAAP adjustments to earnings in the first quarter of 2015.

  • Revenues of $124.7 million, compared to revenues of $149.7 million in the first quarter of 2015.

  • GAAP expenses of $128.3 million and adjusted expenses of $122.7 million compared to GAAP expenses of $127.4 million in the first quarter of 2015.

  • Average daily trading volume in the U.S. of 162 million shares versus 125 million shares in the fourth quarter of 2015 and 191 million shares in the first quarter of 2015. POSIT [(R)] average daily U.S. volume was 65 million shares compared to 49 million shares in the fourth quarter of 2015 and 93 million shares in the first quarter of 2015. Total average daily U.S. volume traded through POSIT Alert [(R)] was 13 million shares, compared to 8 million shares in the fourth quarter of 2015 and 17 million shares in the first quarter of 2015.

  • In Europe, average daily value traded in POSIT was $1.37 billion, up from $1.24 billion in the fourth quarter of 2015 and $1.30 billion in the first quarter of 2015. Total average daily value traded through POSIT Alert in Europe was down 2% compared to the fourth quarter of 2015 and down 23% compared to the first quarter of 2015.

  • The repurchase of 588,000 shares of common stock for a total of $9.6 million under ITG's authorized share repurchase program. Repurchases since the first quarter of 2010 have totaled $240.7 million for a total of 15.9 million shares, resulting in a decrease in shares outstanding, net of issuances, by more than 24%.

Commenting on the results, ITG Chief Executive Officer and President, Frank Troise, said, "We are regaining business momentum, as shown by the sequential revenue improvements in all four of our operating regions, although work still needs to be done to engage more deeply with our clients. As we conclude our end-to-end business review in the coming months we will look to make targeted investments to establish our place as the best-in-class provider of execution, liquidity, workflow and measurement solutions to the institutional trading community."

Regional Segment Results

ITG's North American revenues were $82.4 million in the first quarter of 2016 compared to $75.8 million in the fourth quarter of 2015 and $99.4 million in the first quarter of 2015. ITG reported net income of $3.2 million in North America in the first quarter of 2016, compared to a net loss of $2.0 million in the fourth quarter of 2015 and net income of $8.9 million in the first quarter of 2015. U.S. revenues were $66.3 million, up from $63.3 million in the fourth quarter of 2015 and down from $80.5 million in the first quarter of 2015, including the impact of the sale of the energy research business in the fourth quarter of 2015. Canada revenues were $16.1 million, up from $12.5 million in the fourth quarter of 2015 but down from $18.9 million in the first quarter of 2015, including the impact of currency translation.

ITG's Europe and Asia Pacific revenues were $41.9 million in the first quarter of 2016 compared to $40.4 million in the fourth quarter of 2015 and $50.1 million in the first quarter of 2015, including the impact of currency translation. European revenues were $31.1 million, up from $30.7 million in the fourth quarter of 2015 and down from $36.6 million in the first quarter of 2015. Asia Pacific revenues were $10.8 million, up from $9.8 million in the fourth quarter of 2015 but down from $13.5 million in the first quarter of 2015. ITG's Europe and Asia Pacific operations reported net income of $4.1 million in the first quarter of 2016 compared to $2.5 million in the fourth quarter of 2015 and $10.5 million in the first quarter of 2015.

Corporate activity reduced GAAP net income by $9.7 million in the first quarter of 2016, including the after-tax impact of the amount expensed during the first quarter of 2016 for the upfront cash and stock...


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